The North Kitsap School District is seeking public input on the 2021-22 budget, which is facing nearly a $2 million deficit.
In an email sent to NKSD families, superintendent Lauryn Evans invites families to learn about the budgeting process and specific impacts on NKSD and provide feedback that could help the district through this complicated process.
The email includes links to two 5-minute videos that break down how school budgets are structured, what the 2021-22 budget looks like and other documents to help the public better understand education funding.
“We hope that those who participate take a few minutes to review the videos and the budget forum presentation so that their input is on the topic of the budget itself,” NKSD Communications director Jenn Markaryan said, adding the information can be found at nkschools.org.
Participants were invited to share their thoughts through a forum called Thought Exchange that ended July 30. It is now closed for review prior to the budget hearing and adoption meeting in August.
The first video breaks down how the budget for school districts works. Essentially there are five funds that make up the budget, with the primary annual operating budget coming from the General Fund. The other four funds are for Capital Projects, Debt Service, Associated Student Body and Transportation.
The General Fund pays for day-to-day operations, teacher and staff salaries and benefits, and materials. Over 60% of that revenue comes from state funding, 16% from local levies, 14% goes toward special education, 7% federal grants, 2% donations and 1% federal aid.
The majority of a district’s General Fund expenses go toward salaries and benefits. Teachers get 51%, 27% to classified staff, 6% to principals and administrative staff, and the remaining 16% goes for materials and operating costs.
In 2012, a lawsuit known as the McCleary Decision was filed against the state declaring that it was not living up to its creed to fully fund basic education. In 2013 the state increased school funding, dispersing $15.2 billion to districts statewide. However, the consequence of the increase in state funding was a decrease in levy funding, which for many school districts was the majority of their funding. That led to cuts in staff and teachers.
School districts are also required to have a Fund Balance, equivalent to a savings account to be used only for unexpected drops in revenue, emergencies or one-time funds.
“Not all of the Fund Balance is spendable…, such as inventory and food service program. Others are categorized as restricted, committed or assigned, so specific components of fund balance that must be spent in a particular way in the next fiscal year,” said Jason Rhodes, NKSD director of Finance and Operations.
In the second video, Evans explains the budget planning process and covers changes due to the legislation that came from McCleary.
“In a normal school year, the budget preparation consideration that is at the top of our mind is to balance the incoming revenue with the ongoing expenditures,” Evans said. “Unfortunately, we often run into times where we have inflation, not keeping pace with the costs that we are experiencing for salaries, benefits, and operating costs. This presents an enormous challenge to us…”
After McCleary, the definition of what constitutes basic education was determined to mean, “The education provided by the prototypical model,” which was created decades ago and outlined the number of students the state believes schools need to deliver instruction to in a district.
“You have probably heard that basic education is fully funded. Unfortunately, that is not the case,” Evans said. “One of the things about the prototypical model is that it is not currently meeting the needs of our students. In the state of Washington, only six out of 295 school districts are able to operate under the prototypical model.”
Another change for the district is how health insurance for teachers is funded. Starting this year certain school employees will be covered under the state Healthcare Authority, rather than the insurance companies that the districts had partnered with individually.
“The costs associated with this benefit are much higher than we had when he had our own insurance program,” Evans said. “Also this benefit does not extend to all employees, meaning we are not funded for all the people that we have when we are trying to pay for their benefits.”
As for the next budget, about 58% will come from state funding ($54.5 million). Nearly $14 million is for special education and $13 million in local taxes, $10.3 million in grants, $2 million in federal aid, and $1.2 in donations. Total revenue is just over $94 million.
About 85% of expenses will go toward salaries and benefits, equalling nearly $82 million. Nine percent, or $8.5 million, goes for supplies, 6%, or $5.5 million for purchased services and less than 1% for travel and capital outlay, $36,206 and $44,000, respectively.
The total is just under $96 million, leaving a nearly $2 million deficit.